Tag Archives: Real estate

Developers urged to rightsize shoebox units

The Urban Redevelopment Authority (URA) is encouraging developers of shoebox units to increase the size of their units, up from 28 sq m to 35 sq m, according to a report in The Business Times.

Many analysts said that promoting bigger shoebox units may likely help to cool the property market since the micro apartments have been blamed for fuelling increases in psf prices at property launches.

A spokeswoman from the URA said that it does not specify a minimum size for units, to give developers flexibility to develop units of various sizes in order to cater to the needs of buyers. Rather, it adopts a consultative approach to enhance the quality of new property projects in the country.

“When we receive development proposals comprising many small residential units, our immediate concern would be the quality and liveability of the space for home owners as well as the potential impact on the living environment of the neighbourhood and the local traffic situation,” said the spokeswoman.

“In such cases, URA’s planners will work with the developers and architects to finetune the design of the development, unit size and unit layout.”

She added that “the revised (minimum) unit sizes are typically in the range of 35-50 sq m gross floor area, excluding features such as bay windows, balconies and air-con ledges.”

Some market watchers said URA’s advice was given to developers and to their architects after their applications had been turned down.

It was reported in 2009 that the URA turned down several applications involving apartments below 28 sq m. Last week, the URA told The Business Times that in processing development proposals, it assesses the overall project design, unit layout and building configuration, as well as the localised traffic situation to guarantee that proposed shoebox unit projects can sustain a quality living environment for buyers.

“In general, residential units should be self-contained with basic amenities such as a living area, bedroom, kitchen and bathroom.”

Estimates from one developer showed that a unit with a gross floor area of 35 sq m, excluding balcony and air-con ledge, may have a saleable area of 40.5 sq m or approximately 436 sq ft. The developer noted that the URA is more likely to be strict in ensuring that unit sizes are not too small for projects with a large proportion of one-bedroom and one-bedder-plus study units.

“But if the one bedders make up a relatively small proportion of units in a large development, which also has bigger units like two, three and four-bedroom apartments, URA’s planners may allow a few units even if they’re under 35 sq m. A lot will also depend on the layout of these units,” the developer said.

Source : PropertyGuru – 16 May 2011

Resale options for ageing condos

For private property owners, the 60-year mark is considered a major milestone — they could either watch their properties depreciate in value or opt for a collective sale.

Although banks are generally reluctant to lend to owners of older properties, things are not as bad as they seem since there are still some banks that are flexible with mortgages on older properties, and there is the Central Provident Fund (CPF) that can accommodate purchasers eyeing mature properties.

Last month, the plight of owners of ageing properties made the headlines, as the Singapore Land Authority (SLA) rejected the application of The Arcadia condo for a lease top-up despite obtaining 100 percent support from the owners.

SLA’s decision has also turned the spotlight on other ageing condos like Lutheran Towers, One Tree Hill Mansions and Hollandswood Court.

Meanwhile, The Peace Centre and Peace Mansions complex, which has 58 years left in its lease period, has been released into the en bloc sale market, but other properties like Hillcrest Arcadia have resisted that option.

While collective sales became the main option for owners to unlock their home value, experts said there are other ways to curtail the value of homes.

Mr. Ong Kah Seng, Senior Manager of Asia-Pacific Research at Cushman & Wakefield, said owners who want to preserve their home should keep it in good condition, especially when it has historic features that boost its value and make it good for preservation.

He noted that there are still other options to resale the property even if a lease top-up request is denied, just make sure the property is well maintained and the amenities and infrastructure are well enhanced.

“Owners of some aged prime developments may be able to expect better buying interest from purchasers who are cash-rich and do not require home loans,” he said.

Mr. Colin Tan, Research and Consultancy Director at Chesterton Suntec International, said owner-occupiers are typically less concerned about leases.

“When the green movement gets stronger, we might also see fewer en blocs. Instead of tearing down older buildings, which is blatant wastage, they can be refurbished like in other countries,” he said.

In an interview with The Straits Times, Mr. Tan said that banks can also help out. Despite their reluctance to fund older properties, some factors like the borrower’s profile, tenor of the loan and the property’s location are also taken into consideration.

Ms. Lui Su Kian, Managing Director and Head of Deposits and Secured Lending at DBS, said that while most banks do not finance homes with less than 30 years left on the leasehold period, applications are reviewed on a case-by-case basis.

Source : PropertyGuru – 16 May 2011